The High Court has found ACC Bank liable for €4,769,472 in losses suffered by property developer Jerry Beades after the bank failed to produce title deeds needed for refinancing. The judgment did not make final orders: the court said it would hear the parties later on the form of relief, any set-off and costs.
The dispute arose after Fairlee Properties Ltd and Beades sought to refinance loans with Bank of Scotland (Ireland) in 2004. The new lending required title documents for properties on Richmond Road and Richmond Avenue, Dublin, which ACC Bank held as security. The bank could not locate the deeds when the defendants’ solicitors requested them in June 2004; they were found in April 2006.
The bank accepted that its failure fell below the standard of care it sought to provide. The court held that it owed Fairlee and Beades a duty to take reasonable care of the deeds and to make them available for inspection or, where agreed, on accountable receipt. It found the bank breached that duty from June 2004 until the deeds were located.
Fairlee’s counterclaim failed. The company did not establish that it would have sold the Richmond Road property to prospective buyers in 2005, and it did not prove a loss from delayed development or other specific damage. The court also took account of the benefit of an interest-free facility granted to Fairlee in 2006.
Beades succeeded on several parts of his counterclaim. The court found that, if the deeds had been available, he would probably have obtained development finance and started building 48 apartments on the Richmond Avenue site by March 2005, with sales possible from around January 2007. It assessed the reduction in probable development profits at €4.4 million.
The court also awarded €240,000 for losses on three property sales below their estimated market values, €125,043 for the additional cost of finance under an agreement made in October 2004, and €4,429 in commercial rates. It rejected claims for certain other property sales, legal costs, and additional funding costs that were not sufficiently established as caused by the bank’s breach.
Separately, the bank’s claim against Fairlee and Beades for €6,278,355.24 was agreed, subject to any set-off. The court made no order for statutory interest on the bank’s claim or Beades’s counterclaim. It said Fairlee had no set-off, while Beades had a potential set-off of €4,769,472. The judgment left the precise orders, the treatment of the counterclaim against the debt, and costs for later consideration.